Craigslist's Feelings Are Hurt; Lashes Back at EBay

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Craigslist's Feelings Are Hurt; Lashes Back at EBay

Love is so fragile – here today, gone tomorrow. And so it goes for eBay and Craigslist. What started out as a casual relationship (eBay has a 25 percent, minority stake in the classified site) has turned into an ugly little fight.

EBay launched the first attack yesterday by filing a lawsuit against Craigslist. The claim, though vague, is that Craigslist "adopted measures" that dilute eBay's stake by more than 10 percent. How much money are we talking about? Unclear. But let's assume Henry Blodget's $5 billion estimated valuation of Craigslist is at least in the ballpark. If so, we're talking about reducing eBay's $1.25 billion stake by $125 million.

Craigslist, equally vague, denied it has done anything to dilute the value of eBay's equity.

"We are surprised and disappointed by Ebay’s unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us. Coming from a shareholder that views Craigslist as a prime competitor, filing suit without so much as mentioning these assertions beforehand seems unethical, and hints at ulterior motives," the blog said.